Bankruptcy
halts moves to
foreclose on parks

The owner of Waimea and
Sea Life parks disputes the bank's
mortgage claims

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By Russ Lynch
Star-Bulletin

The operator of Waimea Valley Adventure Park and Sea Life Park filed for bankruptcy reorganization yesterday, in a dispute with Bank of Hawaii.

But the company, Hawaii Attractions, said the parks are open and doing well, vendors are being paid, and employees are being retained.

"We're current with all the payments. We've been paying the vendors, and things are looking up for the parks," said the parks' attorney, Dan Nadborny.

The Chapter 11 bankruptcy filing was made to stop Bank of Hawaii, which holds mortgages on the property, from proceeding with a recent move to have the properties sold and impound their cash, Nadborny said.

Nadborny, representing New York businessman Christian Wolffer, who bought the parks in 1996, said there is a dispute over how much Hawaii Attractions has to pay the bank to buy out the mortgages.

But after a Hawaii court ruled that a dispute over the terms of a deal with the bank has to go to a jury, the bank reactivated a 1996 foreclosure against the previous owner. That foreclosure had been subject to a "standstill" agreement intended to prevent either party from taking any action, Nadborny said.

When it reactivated the 1996 foreclosure, Bank of Hawaii had a foreclosure commissioner appointed, Nadborny said. The commissioner, Guido Giacometti, started seeking buyers so the parks could be sold out from under Attractions Hawaii, and Giacometti impounded $329,000 of Hawaii Attractions' money and paid $230,000 of it to the bank, the parks' attorney said.

Bank of Hawaii spokesman Stafford Kiguchi said the bank does not comment on pending litigation.

The dispute has its roots in the parks' poor financial condition before Wolffer stepped into the picture. Bank of Hawaii had foreclosed on the owners, the Pietsch family, saying mortgage payments were delinquent.

When Wolffer entered the picture, he paid Bank of Hawaii $6 million, and a mortgage investing company he set up, Hawaii Attractions Funding Co., agreed to buy Bank of Hawaii's interest in the parks over a period of time.

Hawaii Attractions agreed to pay interest on the bank loan until the funding company could buy the mortgages.

Bank of Hawaii agreed to hold off its foreclosure as long as Wolffer and his group kept current on the payments and bought the mortgage by June 30, 2000. However, a dispute arose between the funding company and the bank over how much Wolffer would have to pay for the mortgages. His attorneys have said he believed the amount was $498,000, while the bank said it was $4.3 million.

Shortly before June 30, Wolffer sued to have a court determine the amount. The court ruled that it should go to a jury.

In a separate case between the operating side of Hawaii Attractions and the bank, another court in January allowed Bank of Hawaii to resume its foreclosure and sell the properties.

Wolffer's attorney said the bankruptcy filing is intended to stop that while the dispute is resolved. Wolffer, meanwhile, has paid for improvements and wants to operate the parks well into the future, Nadborny said.